AIP column: Retail health care and reform

posted at 9:30 am on September 3, 2009 by Ed Morrissey

How can the explosion of retail health-care clinics point the direction of real reform for our health-care system? In my latest column for American Issues Project, I look at the implications of two studies done by the Rand Corporation on the impact of these cash-basis clinics in shopping malls and big-box retailers like Target and Wal-Mart in my state of Minnesota. Not only do these clinics outperform traditional doctors’ offices and urgent care centers in customer satisfaction, but they also cost less — and compete for customers by using price transparency:

When it came to fees, the results were even more dramatic. For the various kinds of services studied, the average visit to a retail clinic cost $110, versus $156 for urgent care and $166 for a family doc. As for ERs? A cool $570. While even $110 for a clinic visit seems pricey, that is only the average for the three procedures studied. Minute Clinic, the industry leader with 514 outlets, charges just $62 for a minor illness or injury exam and $20 to $66 for a wellness or prevention visit.

Average cost per lab test in the Rand study also differed significantly depending on the provider: $15 at retail clinics, $27 at urgent-care facilities, $33 at doctors’ offices and a whopping $113 at the ER. The study did not bear out the fear that retail clinics would be inclined to overprescribe drugs, and when the clinics did write a prescription, the out-of-pocket cost was lower: $21 compared to a high of $26 for ERs.

What does this mean for reform? The success of retail clinics should herald an effort to get insurers and other third-party payers out of the way to restore price transparency, and put insurance back in the business of catastrophic coverage:

In 2007, the Minnesota Department of Health estimate for premiums paid per person in the state was $3,627, or about $302 per month. With that money, consumers could have visited clinics for one wellness visit and three illness or injury visits every month and still have had money remaining at the end of the year. For myself, a Type II diabetic with an easily-managed thyroid condition, I would need at a minimum two wellness visits and one blood lab every year, which would cost at most about $300 for the entire year. I would have $3300 left over to spend on other priorities each year rather than paying into an insurance pool.

Verum Serum, which tipped me to the Rand studies, thinks along the same lines:

But what this study shows so clearly is that the marketplace is already in the process of addressing the need for cheaper, better, more equitable primary care. It’s doing this by decentralizing the system, i.e. simple problems can be handled farther away from the hub (and expense) of hospitals and doctor’s offices by nurse practitioners who cost less to train and therefore less to employee.

Inevitably, this leaves doctors and hospitals free to focus on more serious problems instead of wasting their $200K education looking at sore throats and ear infections. Reduced demand on doctor’s offices and hospitals will also force doctors to begin competing for patients. Competition will drive prices down.

In short, you have the beginnings of a better system, one that doesn’t require excessive government regulation of the marketplace or a complete takeover of the insurance industry. One that doesn’t lead to rationing or long wait times to see a care provider. One that relies on decentralization, rather than centralization.

Be sure to read all of John’s post, and of course the rest of my column.

Blowback

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Comments

Perhaps no better example of the benefits of capitalism in healthcare is LASIK surgery which has seen prices come down from $2,500 and eye to less than $1000 while outcomes have improved. I saw another one the other day which could do the same. There is a laser tattoo removal company in Los Angeles which has lowered the price of laser tattoo removal by 40% over what a typical doctor charges and I read where they’ve done over 50,000 procudures in the past few years and are making a fortune.

I have used Minute clinic for myself and my family many times. All experiences with at least satisfactory. What I like is that it is NOT staffed with a doctor, but a experienced register nurse. The nurse is hooked up with a doctor she can coverse with via electronic communication so she can get a question answered if need be.

We do NOT need doctors for every ailment. Heck, we do not even need doctors to deliver babies when all is going accordingly.

My wife is in nursing school at the moment. I am diligent about rebutting the liberal programming she gets in class. Thankfully, there has only been one instance of an intense indoctrination, community health. But I have also argued with her about these clinics and how they can be one of the answers to providing high quality, low cost care to unclog the hospital ER’s. I am all for these cash clinics. I also think these kinds of clinics allow medical professionals the opportunity to stick close to the ideals of their chosen profession, which is to help people, and leave politics and bureaucracies aside.

I just went to a retail clinic in a neighborhood Kroger for a persistent sinus infection. It was $50, of which my co-pay was $20 and the rest covered by my insurance. Very reasonable, even without the insurance coverage. The nurse practitioner spent 15 minutes with me, longer than any other doctor ever did. She noticed my (yuck) “bounty” of earwax and she removed it.

I received a prescription for antibiotics and I was out the door. I had it filled 15 feet away at the Kroger pharmacy (saving me an extra trip, remember that, you greenies, when you complain about retail clinics) and that was that.

My wife is in nursing school at the moment. I am diligent about rebutting the liberal programming she gets in class

I went through a nursing school when I was around 38 and got in trouble over my teachers teaching liberal doctrines in my class. I basically told them to just stick with teaching nursing and don’t waste my time on what you believe or what your opinions are. Some of my classmates, the older ones, cheered while most do not know what is wrong with the teacher trying to indoctrinate them. Its just sad how the public schools are doing to our children these days.

The investigators judged quality of care by 14 different measures, including what kinds of tests were ordered, what drugs were prescribed and whether follow-up visits were scheduled.

Nothing on accuracy of diagnosis or response to treatment?

Having recently been discharged from a hospital with seveal followups performed by a PA in the surgeons office, I was not favorably impressed. Routine nursing care was fabulous, PA,..not so much. Only one data point, I know.

Enough of this preventative care crapola. When we grew up you only went to the doctor or hospital if you cut your arm off or something like that. Same thing with drugs. You didn’t have any and it was fine.

My family physician is one of the very few in the country who takes absolutely NO insurance. He has his own lab and x-ray facility. His office is in a professional building… no fancy artwork, fountains, etc, just a clean professional building next to the hospital he works with. Office visits are usually under $75, my annual physical with all the blood work and other tests runs around $300. Fees are transparent, understandable, explained up front… and adjustable, if the doctor wants it that way.

What he saves by not having to process insurance claims, he either puts back into his practice or passes on to his patients.

My family physician is one of the very few in the country who takes absolutely NO insurance. He has his own lab and x-ray facility. His office is in a professional building… no fancy artwork, fountains, etc, just a clean professional building next to the hospital he works with. Office visits are usually under $75, my annual physical with all the blood work and other tests runs around $300. Fees are transparent, understandable, explained up front… and adjustable, if the doctor wants it that way.

What he saves by not having to process insurance claims, he either puts back into his practice or passes on to his patients.

Insurance is part of the problem, not the solution.

itsacookbook on September 3, 2009 at 10:06 AM

I don’t know if I could trust a doctor without fancy artwork on the wall and two dozen outdated magazines in the waiting room.

Not really. I’m a retired veterinarian and we do a bit more than office visits. However, your point is well taken,..costs have to be transparent and competitive. However, we are working with discretionary dollars and human medicine isn’t.

Ed,
The big problem with these clinics is that
(1) They aren’t free like ObamaCare would be
(2) They don’t give the government more power to help take care of us and protect us from tonsil-chopping and limb-wacking doctors.

Here is Wisconsin there’s a law about insurances requiring coverage of contraceptive services. Aside from the moral issues some would have with that, I have to wonder why contraceptive services need to be covered by insurance. Insurance should only be used for the unexpected cost. I have car insurance for when my car is in an accident, not for routine checkups, oil changes, and lube jobs. Somewhere along the line we have confused health insurance with health care and we won’t really get a grip on the cost issue until we change that perception.

The obvious solution is for a John Edwards style law firm to file a multi-billion dollar class action suit against these clinics to drive them out of business so that people use hospital ERs as the government intended.

I think you’re right on the money. During my childhood in the 60s, we had major medical insurance for just that, really MAJOR medical problems. Everyone was expected to pay routine stuff. Sometime, somehow, we completely lost that concept.

I think you’re right on the money. During my childhood in the 60s, we had major medical insurance for just that, really MAJOR medical problems. Everyone was expected to pay routine stuff. Sometime, somehow, we completely lost that concept.

jwolf on September 3, 2009 at 10:46 AM

The mentality now is that these sorts of things are rights and should be provided for you. It’s disgusting.

forgive the off topoic post but
Olympia snowejob needs to be stopped !
Call her office and say you are from Maine and represent a group of seniors against obamacare. It doesn’t matter if you don’t live in Maine. Find a zip code and town name off the net and call her now. Or say you are a moderate dem who voted for her, and you are against obamacare or any public option. We need to burn her local Maine offices as well as Washington. Call her now before she caves to the libs. Call her now!!!!

Very good! This is the theme that conservatives really need to be pushing to “reform” health care. Heck, the only “reform” needed would be a fast-track system of licensing of these cash clinics.

As far as regulating the insurance companies back down to catastrophic-only, I doubt that would be needed either. Any good marketing manager is going to look at the numbers, and figure out that would be a good option to have for people to be offered. Oh, you can’t really afford the full-ride policy? How about this one, covers you in event of cancer, heart failure, etc, and there’s at least one more customer that the insurance company might not have had.

Was discussing this with MrsJamesLee, about getting this dopey idea out of people’s heads about getting insurance from employers. She currently has a good policy, which she kicks in something like $50 a month. On compensation statements, however, the company is paying $13,000 (!!!) a year per employee for coverage. Over a thousand dollars per month.

I have an individual policy on myself. I pay approximately $2500 per year, with the same insurance company, pretty much the same coverage. The only difference being that the fairer half of us have different systems to be concerned with, making things slightly more expensive.

So we’ll round up, and say $5000 a year for her as an individual. If the company decides to drop covering employees, and even splits the difference, she COULD have an extra $7-$10 thousand a year in her paycheck, and the HR Department has a helluva lot less workload. And less than the pay increase would go to buying her own policy, which is NOT dependant on keeping the job.

Couple that with the cash-clinics for when you have the sniffles or a sprained ankle, allowing you to drop to catastropic-only coverage, throw in a little limits on the tort system to avoid the “jackpot justice” mentality so many have, and presto-bingo! Crisis Averted!

We have two economic systems in this world: The first has consistently reduced costs, improved quality and efficiency, and lowered prices. The second features poor quality, inefficiencies, and rationing to reduce costs. If your goal is a better health care system, why on Earth would you choose the second system as a means to get there? Is it me or are the facts just escaping some people?

Given the realities of pricing and competition, we should reform the health system not by building more all-encompassing insurance plans, but by returning health insurance to its rational place: as a bulwark against catastrophic loss.

Such a common sense solution, no one in Washington will ever figure it out.

I have TriCare – I’m a military retiree – but I’d be willing to go with this kind of concept. I mean, we’re broke and we need to do something – and I’m even willing to just allow my TriCare to handle catastrophic coverage for myself. And If I can go there – I don’t see why everyone else isn’t willing to.

The concept is good and similar to what I saw in the Navy. We didn’t have a Doctor onboard the submarines I was on. We didn’t have a doctor aboard the cruiser I was on. What we did have was a Navy Corpsman – kind of like a nurse I guess – but these guys are awesome. They did all the heavy lifting in the medical world in the Navy. They go out into combat also with the Marines – many Marines will vouch for the guys – they’re heros.

And they are enlisted men and women.

The doctors in the Navy are reserved for LARGE commands – and for higher echelon medical units that handle cases the corpsmen refer to them. To this day – I’ve never seen my CIVILIAN doctor – I’ve only seen his nurse practitioner. She wonders why I call her “Doc” – and it’s because – to me – she is my doc. Corpsmen were all I really ever needed in the Navy.

The big problem with these retail clinics, however, is that it puts sick people out in the community with all the healthy people who are just going about their day, shopping and what not. It has the possibility to be a public health nightmare if you have too many infectious people walking around amongst unknowing people shopping for groceries.

And are they really staffed with just an RN, or an advanced practice nurse, an NP? RNs are great, but they are not diagnosticians. They simply aren’t trained for it.

My cousin is on a hospital board, and they want to start some of these clinics to take the pressure off the ER, etc. They are thinking of letting the clinics have access to our medical records, as they went electronic years ago, but I said NO. I don’t want Wal-Mart, or the government for that matter, to have access to that information.

Some doc-in-the-box clinics have negotiated contracts with insurance companies and some don’t. They do this to cover after hours minor problems so folks use them rather than an ER. Some of these clinics also so school physicals on a walk-in basis. It’s convenient and work well in some communities. Someone asked about pharmacies – Pharm reps often give these clinics & the free & reduced fee clinics in lower income neighborhoods “starter packs” to hand out… no mandate required. They do it out of the evilness of their hearts.

In some states there are “urgent care” doc-in-the-box clinics they are staffed with an on site MD and usually at least one RN and an EMT/paramedic. They handle urgent care situations like fractures/cuts/asthma etc. If things get more complicated they ship you to a hospital. You have to be careful here – most of these do not have negotiated contracts with insurance companies, they rely on state laws that say an ER gets paid an in contract rate if they treat you on an emergency basis. If your insurance company deems your conditions not an emergency – like you could have called your physician, or gone to a contracted ER they won’t pay the urgent care center. You must be a participant in your own care. BUT if you don’t have insurance these urgent care centers are vastly cheaper than going to an ER. I would liken these centers to the Veterinarian’s office comparison they have more of their own equipment on site & do more procedures.

Definitely the way to go. I have been to Minute Clinic in a pinch and the service was great the price was very affordable. I took the savings factor one step further by taking the prescription to Walmart.

I think you’re right on the money. During my childhood in the 60s, we had major medical insurance for just that, really MAJOR medical problems. Everyone was expected to pay routine stuff. Sometime, somehow, we completely lost that concept.

jwolf on September 3, 2009 at 10:46 AM

State and Federal mandates effectively outlawed that type of coverage. HSA’a are the closest thing to that and Democrats fought that too.

Governments now dictate the minimum coverage you can buy and many require insurance companies to pay for everything from hair transplants to breast implants. Whether you want the coverage or not.

It’s an easy way for politicians to say they’re helping the little guy by socking it to the evil insurance companies. The result is an indirect tax on all healthcare and a loss of individual liberty.

Not everyone who goes to these minute clinics have infectious diseases. By your assessment the school nurses office should be off school property. I hear you singing ‘I got the flu babe.’ lol

sonnyspats1 on September 3, 2009 at 12:56 PM

Not everyone does, but most of the problems that are seen in these clinics are infectious in nature. Not plague level, but but infectious just the same and what is just a cold to the average person could be a disaster for poor grandpa shopping for his Geritol at Walgreens.

And the school nurse’s office is different…little kids are dirty creatures and they come down with EVERYTHING. It’s a risk of sending your kid to school (a very reasonable risk, and the kid getting sick serves a good purpose in training the immune system) and comes with the territory.

I’m also not saying that retail clinics are bad, I don’t honestly know too much about them as far as how they’re set up,etc. But hopefully the designers of them have thought about sequestering the clinics in a location away from the “healthy” shoppers. And I wouldn’t be comfortable taking myself or my family to an RN for a medical problem…for nursing care, absolutely as that is their function. A NP yes, but not an RN with no advanced training.

Tell me what is the difference if infectious people walking in to pick up a prescription? I went to Munite Clinic a couple of times before my Blue Cross/Shield was a couple of years ago and I was very satified with the results.

Having recently been discharged from a hospital with seveal followups performed by a PA in the surgeons office, I was not favorably impressed. Routine nursing care was fabulous, PA,..not so much. Only one data point, I know

Next time ask to see the Nurse Practitioner, a capella. There is a difference in level of education and training between an NP and a PA. Also, PAs are more medical/disease oriented, whereas NPs focus more on whole person care IMHO.
This level of care works for many folks and is convenient and cost-effective. It is no more contagious than any other place around, BTW. Wash your hands often, everybody!!!

I used the same type clinic when I fell ill visiting Florida. Within in twenty miles I had several to choose from. One hour later I was good to go with all the med scripts, lung x-rays, blood tests etc. In and out for less than $300.

I’m still scratching my head figuring out why these are not everywhere.

Late to what is probably now a dead thread but I wanted to clarify for those who are unsure – these clinics are indeed staffed with Nurse Practitioners, not RNs. Nurse Practitioners are Master’s level prepared in addition to having had to work several years as an RN in their specialty prior to their NP training. Interestingly, the clinics don’t employ Physician Assistants, who have similar education and training, and I’m not sure why they don’t.